For wholesalers and retailers, understanding the regularity of your supply chain is vital to help you prepare for peaks and troughs in demand throughout the year. During peak seasons is when your ordering, distribution, and sales increase significantly to levels far above your normal rate, and the timing of these will vary among businesses depending upon sector, but knowing when your peak season occurs, and preparing for it, is critical for success.
For many UK businesses Black Friday, Cyber Monday, Boxing Day and the January sales are key peaks and retailers report up to 240% increase in sales on Black Friday alone.
Without thorough planning and preparation, peak seasons can provide several challenges for businesses including bottlenecks and logistical setbacks, warehouse limitations, quality control implications, labour shortages and difficulty in managing inventory. However, if you understand your supply chain and your peak season and prepare properly, there is no reason why it shouldn’t be an opportunity for high profit margins and customer growth.
As most the UK’s peak ecommerce dates are towards the end of the year the pressure is already mounting for thousands of retailers and wholesalers and will continue right through until early next year. Now is the time to start preparing your business to ensure ultimate success. In fact, you should have already started!
Where should you start?
Analysing past peak seasons to establish what went wrong, and what went well is a good place to start so you can learn from past mistakes if applicable and put measures in place to avoid the same problems reoccurring. Historical data can also support your labour planning and demand forecasting to help you calculate risk based on previous data.
Remember last November? Across the news were stories of HGV driver shortages and supply chain bottlenecks due to rising fuel costs, and it caused pandemonium for supply chains. This year will likely see the same so avoid playing the waiting game to monitor freight costs – they show little sign of reducing so get your inventory orders in early.
Maintaining stock levels is vital because if you start running out of bestselling products during your peak season then it can have disastrous consequences to your profit margins. Automated stock replenishing features on your stock management software can be useful here to ensure you don’t lose the sale – the customer’s estimated delivery date changes but if they’re happy to wait then the sale is saved. You could also consider pre-orders for high value items to help you manage supply and demand and secure orders without the time pressures to fulfil them immediately.
Offering your customers a clear delivery promise before they purchase will improve conversions, offer a competitor advantage and improve your customer experience. But remember, the key word here is reliable. Always offer a realistic delivery date to manage customer expectations rather than over-promising a quicker delivery than you can manage.
Your capacity at which you can pick warehouse items is one of the biggest limitations that some businesses face and can often result in large numbers of orders being delayed as they are waiting to be picked and processed. Leading up to your peak periods focus on training programmes and re-skilling staff, reorganising your workforce and adapting shift patterns and recruiting in plenty of time to avoid labour shortages. It’s important to remember though that with an influx of temporary staff there will inevitably be poorer performance so try to balance the level of temporary and permanent staff appropriately where possible.
Are products moving to the right place at the right time?
How much is it costing to move items?
Do you know your inventory figures in real-time and the location of each product?
How long does it take to process a returned item, and why has it been returned?
All these questions, and many more, can be answered by equipping yourself with a robust supply chain management solution to improve the efficiency of your order processing, and give you real-time visibility into your supply chain and help to overcome issues as they arise.
For many of the UK’s ecommerce retailers and wholesalers, the peak season is fast approaching with Black Friday and Cyber Monday at the end of November, and Christmas and the January sales not far behind. Understanding your supply chain is critical to ensure you don’t encounter some of the common challenges that arise from being unprepared such as logistical difficulties, warehouse limitations and quality control issues. Preparing early and equipping yourself with robust tools to give valuable real-time insight can lead to profitable results. Evaluating past performance, maintaining stock levels and using your data to identify issues quickly are all key to success.
For more information about how our Supply Chain Management software can help you maintain a successful and efficient supply chain then please contact us today.
Posted On: September 13, 2023
